Patient balances present one of the most significant challenges in revenue cycle.
Eighty-five percent of covered workers have a deductible and in 2018, the average deductible was $1,573. The percent of patients unable to pay a $1,000-plus medical bill is 56 percent, according to the ninth annual InstaMed Trends in Healthcare Payments report.
PAPER VS. DIGITAL?
InstaMed's client solution is to go electronic at the time of registration to increase collections. Eighty-five percent of consumers own smartphones, and many of them are constantly checking their messages; Why not make billing a part of that experience, is the argument. Yet 90 percent of providers are still sending out a paper bill, according to the report.
Michael Rawdan, senior director of Revenue Cycle and Patient Experience at St. Luke's Health System in Idaho, said paper works for the large system in the relatively rural state. Paper is what three-quarters of their patients want and some still pay cash.
St. Luke's made the decision to revise its mailed statement and realized a 10-12 percent increase in the percent of patients who paid, Rawdan said.
In the age of consumerism, deciding what works best often comes down to the consumer. But in an age of squeezed operating margins, consumerism must be combined with what works best to get paid faster and to collect all that is owed.
Michelle Fox, director of Revenue Operations and Patient Access at Health First, an integrated delivery system in Florida, said the provider is still sending paper statements while seeing the many advantages of digital billing.
"Going paperless represents an efficient way for hospitals to collect what they're owed due to the automation and ease of use," Fox said. "Digital billing reduces cost to collect as well as creates a better patient financial experience."
HOW IT WORKS AT HEALTH FIRST
Health First chose to concentrate on electronic estimates to get upfront collections.
Patient financial data is integrated in a point-of-service collections process that includes all payers and services. Prior to services being rendered, the provider has the patient's insurance eligibility, benefits verification, authorization, copay amount, deductible and coinsurance.
Every patient is given an estimate, explaining the benefits and clearly identifying how much is owed, and then is ask for payment upfront.
Through this effort, Health First has seen a 27 percent increase in up-front collections and hit 2.4 percent of net revenue, well above the industry average of 0.7 percent and best practice at 2 percent.
"The more that can be collected upfront either prior to, or at the time of service, the less is written off to bad debt," Fox said. "With the focus shifting to up-front collections, hospitals are able to experience decreased cost to collect, decreased bad debt write-offs and increased inpatient payments."
Sixty-nine percent of providers have seen an increase in patient responsibility from 2017 to 2018; 67 percent are concerned about collections; 77 percent say it takes more than a month to collect; and 81 percent cannot collect $1,000-plus in 30 days, according to the InstaMed report.
Up-front collections represent the best solution.
To do this, InstaMed offers a digital method for automated payments set up at the time a patient checks-in. In the waiting room, a patient can use his or her phone to create an account, which includes credit card information for automatic payments.
With this solution, providers are three times more likely to collect from a patient upfront, according to Rachel Wulf, director of Product at InstaMed.
THE PAPER CHASE
St. Luke did go "full court press" in its marketing efforts for digital payment, Rawdan said. But the number of patients who choose to pay electronically has remained relatively flat - in the 25 percent range - over the past six months.
"They like the paper process, they want to write a check," Rawdan said. "We've debated, should we do away with cash? The reality is, our patients don't want to do it."
However, Rawdan agrees that upfront payment plans for patients who want to know alternatives to paying the entire bill at once helps to collect what is owed. St. Luke's used analytics to better understand accounts and options such as longer term payment plans, he said.
When the health system set about redesigning its paper statement, it looked at the state demographics such as age and customer preferences. The hospital serves a high percentage of patients covered by Medicare.
In 2017, St. Luke's assembled a team and began improving the patient statement to make it more patient-centered and effective.
With outsourcing partner Kaye-Smith, they looked at how non-healthcare companies such as Starbucks, Boeing and Microsoft, market their products. They simplified the language.
"We took a lot of the attributes that catch people's eyes and incorporated it into our statements," Rawdan said.
The statement launch included training sessions for frontline staff and satisfaction surveys for patients and staff. It got high marks from both. Testing has shown that patients with favorable responses to their statement are more likely to pay and less likely to dispute the balance, according to Rawdan.
In the first months after its release, the improved patient statement led to a 15.5 percent improvement in patient cash flow and a 4 percent improvement in patient satisfaction for the system that collects about $200 million a year. The statement was the only major variable to change during this period.
"If you improve on the paper side, there's a material impact to the organization," Rawdan said. "Patients want to know how much they owe. Make sure the accounting piece of it looks great."
The bill still allows for online payment, and also by phone. For patients who want to go digital, when they register they are able to click into the bill pay platform, MyChart.
"Frankly," Rawdan said, " just asking them what they want helps out a lot."
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